Japan to give US$90m loan assistance

[TamilNet, Thursday, 19 May 2005, 16:07 GMT]Japan is to provide Sri Lanka a US$90 million for infrastructure rehabilitation and small business revival of tsumani affected areas, a press release from Japanese embassey issued in Colombo Thursday said.

Following is the full text of the press release:

"The Government of Japan pledged Yen Loan assistance of 10,006 million Yen (approximately Rs 9,206 million) to the Government of Sri Lanka to support tsunami relief programs. This is in addition to the grant of US $ 80 million (approximately Rs. 8 billion) provided under its Non-Project Grant Aid during January this year for relief, rehabilitation and reconstruction efforts in tsunami affected areas in the country.

"Mr. Kazuo Kodama, Deputy Director-General of Economic Cooperation Bureau of the Ministry of Foreign Affairs in Japan pledged this Yen Loan assistance at the recent Sri Lanka Development Forum 2005 in Kandy.

"This Yen Loan is provided towards the Sri Lanka Tsunami Affected Area Recovery and Takeoff (STAART) Project. Loans under this scheme are offered on highly concessionary terms and administered by the Japan Bank for International Cooperation (JBIC).

"STAART Project consists of two sub-projects aimed at assisting in the recovery of socio-economic activities mainly in tsunami affected areas in the country and bringing the essential infrastructure functions and business activities back to normalcy as early as possible. This is in view of the severe breakdown of socio-economic activities resulting from the tsunami disaster that completely disrupted the normal functioning of the affected coastal areas in the country.

"The two subprojects financed under the STAART Project are as follows:

i. Infrastructure Rehabilitation Project (IRP) Yen 7,006 million

ii. Small Business Revival Project (SBRP) Yen 3,000 million

"The IRP will provide support for rehabilitation and additional construction of small-scale infrastructure in the tsunami affected areas throughout the country and will target a wide range of sectors including; water supply, roads (both national and provincial), irrigation, power and postal services.

"The SBRP will be channeled through the ongoing “Susahana” credit scheme of the Central Bank targeting the revival of tsunami affected small businesses with assets valued between Rs. 5 million to 20 million.

"Taking into account the high intensity of the tsunami calamity and its impact to the overall economy of the country, the loan terms offered in this instance are highly concessionary.

"The terms of the loan are as follows:

Rate of interest 0.75%

Payment period 40 years with a 10 year grace period

Procurement source General untied

"The people and the Government of Japan expects that these two projects will enhance the tsunami rehabilitation efforts of the Government of Sri Lanka and most importantly will restore the livelihoods of the affected people and bring back normalcy in the areas concerned. In the broader sense the revival of the tsunami affected areas would have a very positive impact on the overall economy of Sri Lanka.